Note ban: Loans, card payments over Rs 2 lakh in cash must be shown in ITR

New ITR form provides separate column to disclose such payments during demonetisation

All cash payments of over Rs 2 lakh for paying loans and credit card bills during the 50-day period post demonetisation will have to be disclosed in the new one-page Income Tax return (ITR) form.

The tax department a few days back notified new ITR forms for filing of returns for the Assessment Year 2017-18 (financial year (FY) 2016-17).

Besides providing for declaring income, exemption claimed and tax paid, the forms have a new column providing for declaration for any deposit of over Rs 2 lakh in bank accounts made during November 9 and December 30, 2016, after the old Rs 500 and Rs 1,000 notes were demonetised.

This column is also to be used for declaring cash payments in excess of Rs 2 lakh for repayment of any loan or settlement of credit card bills during this 50-day period, a senior official told PTI in New Delhi.

"The column is an attempt to match the cash deposits made post demonetisation with the annual income," he said.

While all credit cards are linked to permanent account number (PAN) of the holder, almost all loans by scheduled banks are also provided on furnishing of PAN.

The tax department will collate the data it has of cash payments made in excess of Rs 2 lakh with the returns filed. "We want to see if the income profile matches with the cash payments made," he said.

The move comes amid concerns of unaccounted cash or black money being used to settle bills after credit cards were used to make heavy purchases. It could also be that black money could have been used to repay loans.

Post-demonetisation, the government had provided a 50-day window beginning November 9, 2016, to deposit the junked notes in bank accounts. For those with unaccounted cash, it gave them one last opportunity to come clean by depositing 50 per cent of it as tax and parking another 25 per cent in a zero- interest bearing deposit for four years.

The changes made in ITR are an attempt to catch tax evaders, the official said.

Revenue Secretary Hasmukh Adhia had last week told PTI that the new column of cash deposits made during November 9, 2016, and December 30, 2016, was a one-time feature in the ITR and would not be there in the ITR from next year onwards.

The ITR, he had said, would evolve or change every year depending on the need.

While coming out with new ITRs, the Central Board of Direct Taxes (CBDT) had also rationalised them and cut down the number of forms to seven from earlier nine.

While all taxpayers will have to now mandatorily link Aadhaar with their PAN cards, ITR1 (Sahaj) form has been shortened from 7 page to 1 page to enable filing of returns by people with income up to Rs 50 lakh by July 31.

ITR2 is to be filed by individuals and HUFs who do not have income from business or profession and ITR3 is filed by individuals and HUFs having income from a proprietary business or profession.

Also ITR 2 and ITR 3 also have a Schedule AL which require assessees to declare their assets and liabilities at the end of the fiscal.

ITR4 (Sugam) is filed by those individuals who have opted for income calculation under presumptive income from business and profession.